ADM’s financial earnings decline amid market uncertainty but Nutrition business surges

ADM reveals its 2024 fourth quarter and full-year financial results, reporting a decline in earnings amid challenging market conditions. The company says its 2024 financial performance reflects a challenging market environment, with net earnings of US$1.8 billion and adjusted net earnings of US$2.3 billion, marking a decline of US$1.4 billion from the previous year.

At the same time, a recent report from Reuters reveals the company may cut as many as 700 jobs globally.

“With softer market conditions and policy uncertainty around the world going into 2025, we are focused on improving our operational performance, accelerating cost savings, and simplifying our portfolio,” says Juan Luciano, ADM’s CEO and board chair. “As part of that effort, we are announcing targeted actions to deliver US$500–750 million in cost savings over the next several years.”

Looking ahead, ADM has set its 2025 adjusted earnings per share guidance in the range of US$4.00 to US$4.75, citing continued market challenges, including biofuel and trade policy uncertainties.

Challenging headwinds

According to the company, its earnings per share (EPS) of US$3.65 and adjusted EPS of US$4.74 further underscore the market pressures, as both figures trended downward compared to 2023. Moreover, its trailing four-quarter average return on invested capital (ROIC) also softened, landing at 6.7%, while adjusted ROIC reached 8.3%, signaling a need for strategic adjustments to enhance profitability. 

Additionally, ADM’s cash flows from operating activities dropped to US$2.8 billion from US$4.5 billion in the prior year, which it says reflects the broader economic headwinds and operational challenges. 

The company emphasizes that as it continues to navigate these financial pressures, its focus on cost-cutting measures and growth initiatives in high-potential areas like nutrition will be critical to restoring momentum and delivering long-term shareholder value.

In addition to cost reductions, Luciano says that ADM will maintain a disciplined capital allocation strategy, prioritizing strategic investments with strong returns and returning value to shareholders. 

The company has realized an increase in its quarterly dividend as part of this strategy, which he says represents a continuation of ADM’s commitment to drive simplification and better align our resources to deliver long-term sustainable growth.

“We will also maintain our disciplined and balanced approach to capital allocation, including prioritizing selective strategic investments with strong return potential and returning cash to shareholders,” Luciano underscores. “In line with this, we are announcing a 2% increase in our quarterly dividend.”

Nutrition segment surges

ADM reinforced its commitment to its nutrition segment last year despite momentary market challenges. Amid these challenges, ADM’s Nutrition segment delivered notable progress. Fourth-quarter operating profit surged to US$88 million, a stark improvement from the prior-year loss of US$10 million.

Human Nutrition reversed a US$25 million loss from the previous year, posting a US$62 million profit due to higher volumes and an improved product mix.

Animal Nutrition also gained momentum, generating US$26 million in profit. Despite a 10% year-over-year decline in full-year Nutrition segment operating profit, ADM remains committed to expanding this growth area.